SEC clears path for buybacks of non-security crypto tokens

On Sept. 25 the Securities and Exchange Commission’s Division of Corporation Finance published FAQs addressing buybacks on networks that are already functional. The guidance states a buyback announcement for a non‑security token on a functional network “falls outside the promises of ‘essential managerial efforts'” at the center of the Howey test. The answers assume the network is functional and the token is not a security, and the SEC characterizes staff views as lacking legal force.

Data from Allium Labs show crypto projects spent about $638 million on token buybacks through late August 2026, a record total that compares with $545 million for the same period in 2025. Two programs account for most of the activity: Hyperliquid at roughly $370 million and Pump.fun at about $200 million, together near 90% of the total.

Pump.fun’s public dashboard lists roughly $500 million in annualized revenue, about $462.5 million in cumulative purchases and 167.7 billion PUMP tokens destroyed, equal to 16.8% of the project’s original supply. Pump.fun allocates half its revenue to open‑market purchases and permanent burns. Hyperliquid’s documentation and on‑chain records indicate about $1.3 billion of HYPE bought and burned since launch and more than $1 billion in annualized fees flowing into programmatic HYPE purchases.

Other protocols use different mechanisms. Uniswap activated protocol fees on Ethereum mainnet in December 2025 and expanded them to other chains; accumulated fees are released to outside searchers only in exchange for burning UNI. Aave used treasury funds to acquire more than 205,000 AAVE-about 1.28% of supply-for roughly $42 million in its first ten months; governance later debated budget cuts and paused purchases after the rsETH bridge incident.

The SEC’s March interpretation defines a functional network as one where the native token can be used according to its programmed utility. That interpretation also describes a token sold as part of an investment contract while a team raises money against promises of managerial work, and it says that contract can end once buyers stop expecting profits from those promised efforts.

The proposed Regulation Crypto Assets would allow projects to raise up to $5 million over four years under a startup exemption, or up to $75 million every 12 months under a larger exemption with disclosure rules. Proposed Rule 400 would add a transition filing, Form TR, which an issuer would file on EDGAR to certify it has completed or permanently ceased promised managerial efforts. The SEC estimated about 475 issuers a year might use that safe harbor and set a public comment deadline of Oct. 20.

Market participants note headline buyback totals can overstate economic impact when new issuance, emissions or token unlocks add supply. Programs that burn tokens can still leave holders diluted if new issuance outpaces purchases. Analysts prefer net burns against new issuance as a measure when comparing protocols. Crypto buybacks remain small compared with corporate repurchases, with S&P 500 companies spending $1.02 trillion on repurchases in the 12 months through September 2025. Crypto buybacks rose from roughly $366,000 in 2024 to $638 million in under eight months of 2026.